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States Upgrade Medicaid Systems to Deliver Modern Health Care

Tens of millions of Americans rely on Medicaid for health care, and to give them quality, consistent care and qualify for federal reimbursement, many states are adopting a modular approach to MMIS.

a woman and a doctor look at information on a tablet
Medicaid Management Information Systems (MMIS) in states pay claims for Medicaid recipients and gather data on health-care services that are provided under the program. Roughly 84 million people rely on Medicaid to access health care in the United States as of September 2022, according to States must ensure their MMISs are running efficiently in order to qualify for Medicaid reimbursement from the federal government.

To support consistent, quality service, best modernization practices have evolved in recent years, pointing to a modular approach that includes a focus on change management and a quality user experience. Here’s a look at where states are today on that journey.

Jessica Kahn, former director of Medicaid systems for the U.S. Centers for Medicare and Medicaid Services (CMS) and current partner with McKinsey & Company, said that although the state of these systems varies across the country, there are several common trends.

First, constituents and state officials alike have become increasingly interested in the value of data as a result of the COVID-19 pandemic.

And while MMISs hold a significant amount of data, many states are not yet taking advantage of it to create actionable insights.

As the nature of health services continues to evolve, our systems must be flexible and nimble enough to change with the needs of those we serve.
“It’s not just about paying claims,” Kahn said. “It’s also about providing the data to help improve quality, and set rates, and adjust payments, and comply with federal reporting, and really help drive policy priorities.”

States are also starting to automate some of the workflow within their Medicaid systems, like provider screening and third-party liability work. Additional potential for automation lies in the consumer-facing processes, another area Kahn expects to continually gain ground.


A modular approach to MMIS modernization — breaking the work into smaller components — has several benefits, according to Kahn. The first is that it provides quick wins, which demonstrate the value of the work and can boost morale. It also allows states to engage with a more diverse vendor pool with special expertise in different parts of the project, rather than find a single vendor to take on the entire project. Many states now use this modular approach — also referred to as agile development — due to the inherent complexity of state Medicaid systems, which can vary considerably in age and condition.

CMS has encouraged states to modernize their systems with this approach and is providing funding for active modernization efforts, according to Feyella Toney, chief portfolio officer for Maryland’s Department of Health, in a written response to Government Technology.

“As the nature of health services continues to evolve, our systems must be flexible and nimble enough to change with the needs of those we serve,” Toney said.

For Maryland, the mainframe MMIS is over 30 years old and currently slated for replacement. The state’s multiyear modernization program began in 2018 and includes over 20 projects and initiatives that are expected to span the next five to seven years.

For New Mexico, the modular approach helps advance the state’s customer-focused approach to the work, explained Joseph Tighe, MMIS Replacement project director in the Medical Assistance Division of the New Mexico Human Services Department. The state’s multifaceted effort to modernize health-care systems is expected to extend into 2026. In 2023 and 2024, New Mexico is focused on provider enrollment and provider management solutions.

The project’s size and scale earned it a label of “high risk” from the state’s legislative finance committee. But Tighe explained that the state has worked to reduce risk by engaging with different project teams, including independent verification and validation services teams, as well as consistently monitoring the project’s schedule, scope and budget. These efforts are getting results, according to Tighe, noting a marked reduction in risk over the past 12 months.


One of the keys to making these systems effective, Kahn said, is to tie the IT work to program priorities. Having a strong road map that is closely aligned with Medicaid program goals is a good place to start.

To achieve this alignment, she recommended close collaboration between the different people and offices that have a hand in the work to create a bridge between program and technology.

Nevada’s MMIS underwent modernization in February 2019, and according to the state’s Medicaid IT Manager II April Caughron, all systems are now relatively new and capable of accommodating up-and-coming initiatives from the federal and state levels.

Caughron said the state works closely with CMS and will track new initiatives and opportunities as needed to ensure the state can maintain compliance and quality service. Nevada used an Organizational Change Management (OCM) approach to modernization. As Caughron explained it, the people side of change management is critical in making technology changes effective. Nevada also participates in workgroups with other states to share best practices.

“At the end of the day, we’re all trying to do what’s best for the recipients of our state and our providers,” Caughron said. “If we can learn even just the smallest thing from another state from their go-live, we’re absolutely going to take advantage of that; and we’re going to be more than willing to share our experiences, too.”

The OCM approach is also being implemented in the state of New Mexico, Tighe said, which helps organize the work in manageable phases.

New Mexico’s modernization plan also includes more robust analytics and business intelligence capabilities, which will enable the state to leverage data for decision-making. Part of this strategy involves an integrated approach between systems that work together and sometimes even serve the same people, including not only the MMIS but also the state’s welfare information system.

Improved data analytics has also helped guide modernization for Maryland, said Toney. The state’s modernization effort includes the development of a cloud-based data and analytics platform to advance data-informed decision-making.

This story from our March 2023 magazine is part of a larger look at modernizing state systems. Click here to read the rest of the feature.
Julia Edinger is a staff writer for Government Technology. She has a bachelor's degree in English from the University of Toledo and has since worked in publishing and media. She's currently located in Southern California.